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Following several months of courtship, it appears that Softbank has finally agreed upon an investment deal with Uber. According to the Wall Street Journal, the Japanese titan has been successful in a bid to snap up a large percentage of the shares of the ride-hailing company. Uber has offered shares equal to 20 percent of the company. However, the Wall Street Journal speculates that Softbank is will possibly acquire 15 percent of that. This values Uber at $48 billion, which is around a 30 percent discount of the estimated value of Uber amounting to $70 billion. However, the tender offer expires at noon Pacific, so investors could still change their minds before the said period.
The said offer comes at a critical time for the ride-hailing company. The company has had a difficult time for months with a CEO takeover, lawsuits, and a lot of internal struggles. On top of that, Uber has been losing the competition to its rivals such as Didi Chuxing and Grab in Asia and Lyft in the United States. In fact, Softbank is also an investor in some of those competitors. When asked if that would be considered as a problem for Uber, Arianna Huffington, one of its board members stated in October that “This is not marriage; this is a business.” Some months ago, Uber agreed to limit the power of Travis Kalanick, its former CEO, in order to sweeten the deal for Softbank.
According to the Wall Street Journal, the Softbank deal would require investing at least $1 billion into Uber, which is intended to assuage fears that the discounted price would decrease the value of the remaining shares.